Over the past year, the Section 232 tariff landscape for steel and aluminum has shifted rapidly. A series of presidential actions in 2025 significantly expanded the scope of Section 232 steel and aluminum duties while offering limited instruction on how those duties should be assessed. As a result, companies importing steel and aluminum-containing products are facing unclear guidance at a time when CBP scrutiny – and enforcement – is increasing. This lack of clear guidance has led to a lot of importer confusion and to the lawsuit discussed below.
Background on New Steel and Aluminum Tariffs
On February 11, 2025, President Trump issued two Proclamations imposing enhanced import tariffs on steel andaluminum products under Section 232 of the Trade Expansion Act of 1962. While additional Section 232 tariffs had been in place on certain steel and aluminum products since the first Trump Administration in 2018, the orders eliminated certain exemptions from the tariffs, expanded their scope to cover additional products, and increased the tariffs on covered aluminum goods from 10% to 25%.
On February 18, 2025, two Federal Register Notices were published that included lists of "derivative" steel and aluminum products subject to the 25% tariffs on steel and aluminum under Section 232. The Federal Register Notices, which include the specific Harmonized Tariff Schedule of the United States (HTSUS) classifications for the derivative products in Annex 1, are available here (steel) and here (aluminum). The tariffs were increased from 25% to 50% effective June 4, 2025.1 On August 19, 2025, another Federal Register Notice was published, adding 407 HTSUS classifications to the list of products that will be considered as steel-aluminum derivative products.
Approaches to Valuation
CBP has published FAQs and CSMS messages onsteel and aluminum about how to calculate and report the value of the steel and aluminum content of steel and aluminum derivative articles. However, there have been different interpretations of this guidance, including by CBP itself.
The FAQ reads,
"The value of the steel/aluminum content should be determined in accordance with the principles of the Customs Valuation Agreement, as implemented in 19 U.S.C. 1401a. Thus, the value of the steel/aluminum content is the total price paid or payable for that content, which is the total payment (direct or indirect, and exclusive of any costs, charges, or expenses incurred for transportation, insurance, and related services incident to the international shipment of the merchandise from the country of exportation to the country of importation) made/to be made for the steel/aluminum content by the buyer to, or for the benefit of, the seller of the steel/aluminum content. Normally, this would be based on the invoice paid by the buyer of the steel/aluminum content to, or for the benefit of, the seller of the steel/aluminum content."
The CSMS message on steel states that "where the value of the steel content is less than the entered value of the imported article, the good must be reported on two lines. The first line will represent the non-steel content, while the second line will represent the steel content." The CSMS message states the same thing for aluminum.
Some importers interpret this guidance to mean that the value of the steel or aluminum content in a derivative product is the price the foreign manufacturer paid for the steel or aluminum. Other importers (and currently CBP's Base Metals Center of Excellence and Expertise, in informal guidance) interpret this guidance to mean the value of steel or aluminum based on the price paid for the derivative product by the U.S. importer. CBP has issued Customs Forms 28s and 29s that reflect this interpretation.
CBP has not issued any formal guidance in the form of a customs ruling, additional FAQ, or Cargo System Messaging Service message addressing these different interpretations.
New CIT Case
A lawsuit was recently filed in the U.S. Court of International Trade (CIT), challenging how CBP has been valuing and applying Section 232 tariffs on steel and aluminum derivative products.
At the center of the lawsuit is the informal guidance provided by the Base Metals CEE mentioned above. Express Fasteners, Ltd. of Illinois filed the lawsuit, arguing that its imports of screws and fasteners were unlawfully assessed Section 232 steel duties.2 According to the plaintiff, CBP recently began applying 232 duties to the entire U.S. customs value of imported screws and fasteners, which includes machining, fabrication, overhead, the manufacturer's profit, and other costs.
Express argues that the public Section 232 FAQs limit the 232 tariffs to the value of the steel content of the product, as determined by the value their foreign supplier paid for the steel, and that this change in valuation approach was never published and subjected to rulemaking procedures and is therefore an unlawful and arbitrary departure from established agency guidance.
What Importers Should Do
Diaz Trade Law recommends taking the more conservative approach reflected in CBP's most recent, albeit informal, guidance and reporting the steel and aluminum value based on the U.S. customs value of the steel and aluminum, which includes machining, fabrication, overhead, and the manufacturer's profit. If the article includes non-steel, non-aluminum content such as wood or plastic, we recommend allocating the machining, fabrication, overhead, and profit across the steel/aluminum and non-steel/non-aluminum content in a reasonable manner. We further recommend monitoring the liquidation of affected entries and protesting them within 180 days based on the pending litigation. For importers who choose to report the value of the steel and aluminum based on the value their foreign manufacturer paid for these materials, we urge you to consider filing a prior disclosure to pay the duty difference if the court rules in favor of CBP in the pending Fasteners case. All importers should prioritize proper documentation and recordkeeping, as CBP may ask for detailed breakdowns and supporting analysis at any time.
Diaz Trade Law will continue to monitor for developments and will provide additional information as it becomes available. In the meantime, contact us for assistance with valuation procedures, recordkeeping, staff training, and more. 305-456-3830, info@diaztradelaw.com
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
